What Is a Lock-in Period in Singapore Mortgages?
A lock-in period is the fixed timeframe during which your mortgage interest rate remains unchanged, typically lasting between two and five years.[1] During this period, you are committed to your chosen interest rate and cannot switch to a different rate or lender without incurring an early repayment penalty.[1] Understanding lock-in periods is essential for Singapore property buyers because they directly affect your long-term borrowing costs and flexibility.
Most Singapore banks structure their home loans with a lock-in period that protects both the lender and borrower. For the bank, it ensures stable funding costs. For you, it provides certainty about your monthly mortgage repayments, which is particularly valuable when interest rates are volatile.[1] After the lock-in period expires, your fixed rate automatically converts to a floating rate unless you choose to re-fix your loan.[1]
This cluster article builds on our comprehensive Lock-in Period Explained: Complete Mortgage Guide for Singapore Buyers Lock-in Period Explained: Complete Mortgage Guide for Singapore Buyers by diving deeper into how different banks structure their lock-in terms and what penalties you might face if you need to exit early.
Current Lock-in Period Trends in Singapore (2026)
As of February 2026, the vast majority of Singapore banks offer home loans with standard lock-in periods of two years.[4] Some premium packages extend to three or five years, typically offering slightly lower interest rates in exchange for longer commitment.[1] The two-year lock-in has become the market standard because it balances affordability with flexibility for most borrowers.
Recent market data shows that mortgage rates have fallen significantly from 2025 levels, with fixed-rate packages now ranging between 1.4% and 1.8% depending on loan quantum.[1] This dramatic decline—from approximately 3.1% at the start of 2025—has made lock-in period decisions more critical. Borrowers must now decide whether to lock in current low rates or opt for floating-rate mortgages that track the Singapore Overnight Rate Average (SORA).[1]
The chart below shows recent interest rate trends in Singapore to help you understand how rates have moved and what factors influence lock-in period decisions:
SORA has fallen from 3% in early January 2025 to 1.2% by December 2025, its lowest level since August 2022.[1] This downward trend has influenced how borrowers approach lock-in decisions, with many reconsidering whether fixed or floating rates better suit their financial situation.
Fixed vs. Floating: How Lock-in Periods Affect Your Choice
Fixed-rate mortgages come with lock-in periods where your interest rate remains constant.[1] This provides payment certainty and peace of mind, as you know exactly what your monthly repayment will be throughout the lock-in period. Fixed rates are particularly attractive when you believe interest rates may rise or when you prefer predictable budgeting.[1]
Floating-rate mortgages are typically not bound by traditional lock-in periods in the same way.[4] Instead, your interest rate adjusts based on movements in SORA or other benchmarks. While floating rates currently offer lower starting rates (many banks quote from 1.09% for $500,000 loans), your repayment can increase if SORA rises.[2] However, floating mortgages often come with more flexibility regarding early repayment without penalties.[4]
The choice between fixed and floating depends on your risk appetite and financial outlook. If you're uncomfortable with payment uncertainty or believe rates will rise, a fixed-rate mortgage with a lock-in period provides protection. If you're confident rates will remain low and want potential savings, a floating rate may suit you better. Many borrowers now use Homejourney's mortgage eligibility calculator Bank Rates to model both scenarios and see which option saves more money over their projected holding period.
Early Repayment Penalties Explained
If you need to exit your mortgage before the lock-in period ends—whether due to selling your property, refinancing to a better rate, or personal circumstances—you'll typically face an early repayment penalty. In Singapore, this penalty is commonly set at 1.50% of the outstanding loan amount.[4]
For example, if you have an outstanding loan of $400,000 and your lock-in period hasn't ended, a 1.50% penalty would cost you $6,000. This is a significant amount that can offset any interest savings from switching to a lower rate, which is why understanding your lock-in terms before committing is crucial.
However, banks increasingly offer variations on this standard penalty structure:
- Penalty-free partial repayment: Some banks allow you to repay a portion of your loan (typically 10-20% annually) without penalty during the lock-in period.[1] This provides flexibility if you receive bonuses or inheritance.
- Sale waiver: Many floating-rate mortgages waive the early repayment penalty if you're selling the property, making them more attractive for investors or those planning to upgrade.[4] Some fixed-rate packages also offer this feature, though less commonly.
- Repricing options: Banks like DBS offer free package conversion after the lock-in period expires, allowing you to switch to a different rate structure without penalty.[6]
Before signing any mortgage agreement, carefully review the penalty structure. If you think you might sell within the lock-in period, prioritize banks offering sale waivers or consider a floating-rate mortgage instead.
Bank-by-Bank Lock-in Period Comparison
Different banks structure their lock-in periods and penalties differently. Here's what you should know about Singapore's major lenders:
DBS Bank
DBS offers both two-year and three-year fixed-rate packages, with current promotional rates starting around 1.55% for their POSB HDB loan.[1] A key feature is that DBS offers no penalty for early repayment or sale during the lock-in period on selected packages, which is rare in the market.[1] After the lock-in period expires, your rate converts to floating, and you can reprice to a new package free of charge.[6]
DBS has seen significant take-up for their fixed-rate products, with October and November 2025 showing a 13-fold increase in applications compared to the start of the year.[1] This suggests borrowers trust DBS's pricing and flexibility terms.
OCBC Bank
OCBC offers competitive fixed-rate packages with standard two-year lock-in periods. While specific penalty waivers aren't highlighted in recent market data, OCBC typically follows market-standard 1.50% early repayment penalties. You can compare OCBC's current rates and lock-in terms instantly on Homejourney's bank rates comparison page Bank Rates .
UOB (United Overseas Bank)
UOB provides flexible repricing options after the loan lock-in period ends, with promotions allowing free package conversion.[6] This means once your two-year lock-in expires, you can switch to a different rate structure without administrative charges, helping you adapt to changing market conditions.
HSBC, Standard Chartered, and Other Lenders
These banks typically offer standard two-year lock-in periods with market-rate early repayment penalties. Each has slightly different repricing policies and penalty structures, which is why comparing all options is essential before committing.
Rather than visiting each bank's website individually, use Homejourney's bank rates comparison tool Bank Rates to see lock-in terms, penalties, and current rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, and other major lenders in one place. You can even submit one application and receive offers from multiple banks simultaneously, letting them compete for your business.
Strategic Timing: When Should You Exit Your Lock-in Period?
The decision to refinance or switch mortgages should be made strategically, considering both interest rate movements and penalty costs. Here's a practical framework:
Calculate Your Break-Even Point
Determine whether the interest savings from switching justify the 1.50% early repayment penalty plus refinancing costs (legal fees, valuation, administrative charges). If you're switching from 3% to 1.6%, you're saving approximately 1.4% annually. On a $400,000 loan, that's $5,600 in annual savings. The 1.50% penalty ($6,000) would be recovered in just over one year, making the switch worthwhile if you plan to stay in the property longer.
Monitor SORA Movements
If you're on a floating-rate mortgage, track SORA trends. When SORA is falling (as it did throughout 2025), floating rates become more attractive. Conversely, if SORA starts rising, locking in a fixed rate before your current lock-in expires becomes more appealing. Homejourney provides real-time SORA tracking Bank Rates so you can time your decisions perfectly.
Plan Around Your Lock-in Expiry
The ideal time to refinance is just before or immediately after your lock-in period ends. This avoids penalties and gives you maximum flexibility. Many borrowers start exploring options 2-3 months before their lock-in expires, allowing time for comparison and application processing.
Consider Your Life Plans
If you're likely to sell within the lock-in period (upgrading, relocating, or downsizing), prioritize banks offering sale waivers or choose floating-rate mortgages. The flexibility is worth slightly higher rates if it saves you from a substantial penalty.
HDB vs. Bank Loans: Lock-in Period Considerations
HDB loans carry a fixed rate of 2.6%, which is currently higher than many bank offerings.[3] However, HDB loans come with different lock-in considerations. If you switch from an HDB loan to a bank loan, you cannot return to HDB financing in the future.[1] This is a permanent decision that requires careful consideration.
Many HDB owners are currently refinancing to bank loans offering rates below 1.8%, which can save hundreds of dollars monthly.[1] However, ensure the long-term savings justify giving up the option to return to HDB financing later. Use Homejourney's mortgage calculator Bank Rates to model both scenarios and see the true lifetime cost difference.
Key Questions About Lock-in Periods
Can I repay my mortgage early without penalty?
Most banks charge a 1.50% early repayment penalty during the lock-in period, but some offer partial repayment waivers (typically 10-20% annually without penalty) or sale waivers. Always check your specific loan agreement. After the lock-in period expires, you can repay without penalty.[1]
What happens when my lock-in period ends?
Your fixed interest rate automatically converts to a floating rate linked to SORA or another benchmark.[1] You then have the option to reprice (lock in a new fixed rate) or remain on the floating rate. Many banks offer free repricing at this point, so there's no penalty for switching.
Should I choose a longer lock-in period for lower rates?
Banks sometimes offer slightly lower rates for three or five-year lock-in periods compared to two-year terms. However, this locks you in for longer, reducing flexibility. Given the current low-rate environment and uncertainty about future rate movements, most financial advisers recommend two-year lock-in periods as the optimal balance between rate and flexibility.[1]
Is refinancing worth it if I'm close to the end of my lock-in period?
If your lock-in period expires within 3-6 months, it's usually better to wait rather than pay an early repayment penalty. The penalty typically outweighs the interest savings you'd gain in that short timeframe. However, if rates have dropped significantly and you'll be in the property for many more years, refinancing might still be worthwhile.
Can I lock in a rate without committing to a specific lock-in period?
No. All fixed-rate mortgages in Singapore come with a defined lock-in period (typically 2-5 years). If you want maximum flexibility, you'd need to choose a floating-rate mortgage, though you sacrifice rate certainty.[1]
Making Your Lock-in Period Decision on Homejourney
Understanding lock-in periods is only half the battle. You also need to compare actual rates, terms, and penalties across multiple banks to find the best option for your situation. This is where Homejourney's platform makes a real difference.
On Homejourney's bank rates page Bank Rates , you can:
- Compare lock-in terms and penalties from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, and other major lenders side-by-side
- Calculate your borrowing power using our mortgage eligibility calculator, which factors in lock-in period choices
- See real-time rates updated daily from all partner banks
- Submit one application and receive offers from multiple banks, letting them compete for your business
- Use Singpass integration to auto-fill your application in seconds, speeding up approval
- Track SORA movements to time your refinancing decisions perfectly
